US heating oil prices dropped below $3.30 per gallon, approaching their lowest level in more than three months, after the United States and Iran reached a deal to end their war that paves the way for a gradual resumption of energy exports from the Middle East.

Key Highlights

  • US heating oil fell below $3.30 per gallon, near its lowest level in over three months.
  • The Strait of Hormuz is set to reopen without transit fees once the deal is signed on June 19.
  • Sanctions-related restrictions on Iran would be lifted as part of the agreement.
  • Producers cautioned that restoring full energy flows could take months due to infrastructure damage.

US heating oil prices slid below $3.30 per gallon, nearing a three-month low, after President Donald Trump confirmed that an agreement had been reached to end the war between the United States and Iran. The deal is expected to pave the way for a gradual resumption of energy exports from the Middle East, a region that has been a major source of supply disruption since the conflict began.

Trump described the agreement as complete, adding that the Strait of Hormuz would reopen without transit fees once the deal is formally signed on June 19, with sanctions-related restrictions on Iran also set to be lifted at that point. Iranian Deputy Foreign Minister Kazem Gharibabadi confirmed that an agreement had been reached, though he said the full text would remain confidential until the signing ceremony.

For heating oil markets, the prospect of restored flows through the Strait of Hormuz represents a significant easing of the supply constraints that have weighed on the broader energy complex throughout the conflict. The waterway has been a critical chokepoint for crude oil and refined product shipments, and its prolonged disruption had contributed to elevated prices across the energy sector.

Tanker operators including Frontline plc (NYSE:FRO) and International Seaways Inc (NYSE:INSW), whose vessels regularly transit the strait, stand to benefit from a normalization in shipping routes, while domestic refiners such as Marathon Petroleum Corporation (NYSE:MPC), Valero Energy Corporation (NYSE:VLO), and Phillips 66 (NYSE:PSX) will be watching how softer heating oil prices interact with crude costs to shape refining margins in the months ahead.

Despite the positive sentiment, the path to a full recovery in Gulf energy exports still faces several hurdles. These include the clearance of mines that may remain in shipping lanes following the conflict, as well as uncertainty over how strictly Iran will regulate maritime passage through the strait once it reopens.

Producers have also cautioned that a complete recovery in supply could take considerably longer than the initial reopening timeline suggests. Technical and geological constraints at production facilities, combined with infrastructure damage sustained during the conflict, mean that restoring output to pre-conflict levels could take months even after shipping routes are cleared.

For heating oil consumers and traders, the decline below $3.30 per gallon reflects the market's initial assessment that the worst of the supply-driven price pressure may be easing, even as the practical timeline for restored Gulf energy flows remains uncertain. The coming weeks following the June 19 signing ceremony are likely to provide further clarity on how quickly Middle East energy exports can return to more normal levels.